Recording of College Planning Webinar Now Available

In case you missed our College Planning webinar presented by Global College Search Associates in April, a recording is now available.  This is a new recording as the audio problems experienced during the actual presentation have been corrected.  Please click below.  

The Path to a Successful College Search

Dimensional Funds Video

At Portfolio Advisors, our approach to investing focuses on controlling the things which are actually within our ability to do so.  This differs from the conventional approach that relies on market timing, stock picking, and active trading. We believe that the structure of the portfolio is the single most important aspect in determining returns. We also believe that controlling costs, by minimizing trading and using low cost funds, can have a significant positive impact on returns over time. As such, our fund family of choice is Dimensional Fund Advisors. For more than 30 years, Dimensional has been translating compelling research into practical investment solutions. We offer this four minute video that helps explain how Dimensional is different, and how their investment philosophy evolved by drawing upon the academic community.  

To view, click on the link below.

http://www.dfaus.com/why-dimensional/why-dimensional.html

 

Announcement from Portfolio Advisors

There are some new and exciting changes at Portfolio Advisors that were announced by Mike Leffler in a letter sent to clients in early February. In his letter, Mike announced that Tina Mistry and Ken Hatfield have both been named partners and now join Mike as owners of the firm. The letter stated: "As I grappled with the future of the company and its continued success, I began to think that it would be a good idea to share in the ownership of the company.  The problem was with whom and when.  I never liked the idea of selling the company to a larger firm.  I liked the idea of remaining independent with local ownership.  I am happy to say that I had to look no further than within the walls of Portfolio Advisors itself.  I found two individuals that are trustworthy, extremely competent, and have proven track records." To read his letter in its entirety, please read below. 

The Art of Letting Go

Investors, besieged with financial news, reports, and information daily, may be inclined to constantly tinker or make adjustments to their portfolio.  By following the advice from a recent article or a talking head, they can be susceptible to the latest fad or market predictions and may get caught up in the excitement of chasing what are all too often allusive returns.  In his piece “The Art of Letting Go,” Dimensional Fund Vice President, Jim Parker suggests that investors might be better served by following the Chinese Taoism tenant of “wuwei,” or, “non-doing” than micro managing their portfolio. Find this month's article below. 

Who Has the Midas Touch?

From time to time we are asked to offer our opinion as to whether or not gold should be a part of one’s portfolio.  While interest in gold seems to ebb and flow as economic reports and political events unfold, general interest seems to persist.  As such, we thought Dimensional Funds VP Weston Wellington’s recent article exploring the merits of holding gold as an investment is instructive.  Throughout the article Weston cites the thoughtful opinions of Warren Buffett.  His comment that “where gold advocates see a safe harbor, Buffet sees just a different set of rocks to crash into” offers insight into his question of Who has the Midas Touch?    Find this month’s article below.

Investors Flee Stocks at Precisely the Wrong Time

As we approach mid-year 2013, rampant pessimism as measured by consumer sentiment has recently dipped to its lowest level in over 30 years.  This degree of pessimism is so pervasive that some would suggest that “America’s best days are behind her.”  As an investor, how worried should you be?  Maybe not as worried as so many others seem to be as suggested in this month’s article entitled Investors Flee Stocks At Precisely The Wrong Time. The article points out that historically, consumer sentiment and stock market performance are often at odds.  Read more of this month’s insightful article by following the link below. 

http://portadvisors.com/featured-news

Warm Regards,

The Portfolio Advisors Team

It’s Not Too Late to Reduce Your 2012 Tax Liability!

There is still time to reduce your 2012 tax liability by making an IRA contribution before the filing deadline of April 15, 2013 (but please don’t wait until the last minute).  You may be able to contribute up to $5,000 for 2012.  If you are over age 50, you may be able to contribute up to $6,000*.  If you are married and both over age 50, you could save up to $3,360 combined in Federal Income Tax for 2012 (28% tax bracket) provided that both of you have contributed up to the $6,000 threshold.  Not only would your tax burden be reduced by $3,360, your $12,000 combined IRA contributions would continue to grow tax deferred until withdrawal at retirement age.

Another option to consider is a Roth IRA contribution up to the same $5,000 limit.  Similarly, those over 50 can contribute up to $6,000**.  There is no immediate tax benefit to the Roth IRA as after tax dollars are used to fund this retirement vehicle.  However, the benefit is that the Roth IRA is allowed to grow free of Federal and State tax.  Unlike the traditional IRA, there is no tax due when you begin to take money out at retirement age***.  Because Roth withdrawals at retirement are not taxable, they can provide the additional benefit of tax bracket management.  Simply put, money taken from a Roth IRA at retirement might allow one to control in which tax bracket they fall.  Roth IRAs can be a consideration for those who will be in the same or higher tax bracket upon retirement. 

If you have already maximized your 2012 IRA (and Roth IRA) contributions, 2013 contributions can be made with new increased limits.  The contribution limits for 2013 are $5,500.  If you are over age 50, the new limit is $6,500 per person.  To help facilitate 2013 contributions, you may wish to consider setting up monthly automatic checking deductions.  Please let us know if you would like to consider this option. 

Please contact us as soon as possible if you would like to make a 2012 IRA contribution or if you have any questions related to IRA contributions.

The Portfolio Advisors Team

*If you are covered by a company retirement plan, the phase out range for IRA deductibility is $92,000-$112,000 (married filing jointly).  If you are not covered by a company plan but your spouse is covered, the phase out range is $178,000-$188,000. 

**Roth IRA phase-out limits for a married couple is $173,000-$183,000.

***Roth earnings are subject to Federal and State taxes as well as penalties if taken before age 59 ½.